Folgers: the Ewn Era of Coffee Anthony J
Total Page:16
File Type:pdf, Size:1020Kb
The University of Akron IdeaExchange@UAkron The Dr. Gary B. and Pamela S. Williams Honors Honors Research Projects College Spring 2015 Folgers: The ewN Era of Coffee Anthony J. Jakubowski The University Of Akron, [email protected] Danielle Hickman The University Of Akron, [email protected] Annie Pang The University Of Akron, [email protected] Adrianna Hartman The University Of Akron, [email protected] Alex Naragon The University Of Akron, [email protected] Please take a moment to share how this work helps you through this survey. Your feedback will be important as we plan further development of our repository. Follow this and additional works at: http://ideaexchange.uakron.edu/honors_research_projects Part of the Advertising and Promotion Management Commons, Marketing Commons, Other Business Commons, and the Sales and Merchandising Commons Recommended Citation Jakubowski, Anthony J.; Hickman, Danielle; Pang, Annie; Hartman, Adrianna; and Naragon, Alex, "Folgers: The New Era of Coffee" (2015). Honors Research Projects. 192. http://ideaexchange.uakron.edu/honors_research_projects/192 This Honors Research Project is brought to you for free and open access by The Dr. Gary B. and Pamela S. Williams Honors College at IdeaExchange@UAkron, the institutional repository of The nivU ersity of Akron in Akron, Ohio, USA. It has been accepted for inclusion in Honors Research Projects by an authorized administrator of IdeaExchange@UAkron. For more information, please contact [email protected], [email protected]. Folgers: The New Era of Coffee The University of Akron Honors Business Forum Anthony Jakubowski, Danielle Hickman, Adrianna Hartman, Annie Pang, Alex Naragon May 6, 2015 1 | FOLGERS: THE NEW ERA OF COFFEE TABLE OF CONTENTS ABSTRACT…………………………………………………………………………………….…2 INTRODUCTION…………………………………………………………………………..…..3-4 SECONDARY RESEARCH……………………………………………………………….….5-25 Coffee Industry Analysis…………………………………………………………...….5-11 Acquisition of Folgers………………………………………………………………..11-14 Competition…………………………………………………………………………..14-16 Social Media Analysis……………………………………………..…………………16-20 Millennial Generation Analysis………………………………………………………20-25 METHODOLOGY……………………………………………………………………...……25-40 Primary Research……………………………………………………………………..25-27 Creation of New Brand Pyramid……………………………………………………..28-35 Recommendations……………………………………………………………………36-40 Environmental Initiative……………………………………………………...36-38 Social Advertising Campaign………………………………………………...38-40 CONCLUSION………………………………………………………………………………40-41 WORKS CITED……………………………………………………………………………...42-47 APPENDIX…….…………………………………………………………………………….48-64 2 | FOLGERS: THE NEW ERA OF COFFEE ABSTRACT The primary purpose of this paper is to discuss the repositioning of the Folgers brand through a new and improved Brand Pyramid and two strategic recommendations. In order to come to these conclusions, the group utilized secondary research to gain a background on the coffee industry as a whole, the acquisition of the Folgers brand by Smucker’s, the competition relative to Folgers in the coffee market, a social media analysis focusing on the competitors, and finally research regarding the Millennial generation. The conclusions from this secondary research led to the methodology used in order to come up with the new pyramid and recommendations. This methodology included two surveys, the first being sent out to friends and relatives through the use of social media, and the second which utilized the tool Survey Monkey Audience, which was sent to a paid panel of 18-34 year-old coffee drinkers. A stipend of $500 was utilized by the group in order to use the survey resources and to provide monetary rewards to participants in said surveys. The pyramid includes recommendations to appeal to the Millennial generation. The points comprise of a much greater focus on diversity and inclusion, environmental sustainability and corporate responsibility, and awareness of technological advances and a trend towards mobility. Along with these changes to the pyramid, the two recommendations are an environmental impact initiative and a social advertising campaign. The remainder of this paper will provide the findings through the secondary research, how said findings helped formulate the methodology, and thus led to the improvements of the brand pyramid and recommendations which were presented to the Smucker’s executive team on Friday, April 17 th in the Taylor Institute at The University of Akron. 3 | FOLGERS: THE NEW ERA OF COFFEE INTRODUCTION Students enrolled in The Honors College of Business Administration at The University of Akron must complete an in depth research project, known as the Honors Project, to satisfy undergraduate degree requirements. Students are to first enroll in The Honors Business Forum course to learn about teamwork, management, and innovation from leaders in prominent businesses in the greater Akron area. Most sessions are headed by alumni of The University and thus give students a glimpse of the careers that can be obtained after earning their degree. The group meets weekly to hear from a speaker and to discuss how the topic can be implemented into a research project. The sessions continue for one semester prior to the students’ graduation. At the end of the semester, students receive a case study from one of the participating companies. Students are asked to meet certain objectives and present findings to the company at the end of the following semester. As a part of the requirements through the Honors College, students must also complete a detailed research assessment relating to their case. Research should include both primary and secondary findings, project methodology based on these findings, an analysis of methodology results, and finally a conclusion based on the research. This paper is suggested to be no less than forty-five pages and must include contributions from all group members. For the 2014-2015 Honors Business Forum, three companies were chosen to participate in the distribution of case studies. These companies included The Goodyear Tire and Rubber Company (Goodyear), The J.M. Smucker Company (Smucker), and A. Schulman. Groups of four to five students were assigned to each team, with Smucker and A. Schulman having two teams each. The Goodyear team was limited to students that were graduating in the winter term, 4 | FOLGERS: THE NEW ERA OF COFFEE and thus the students prepared their presentation and paper throughout the same time period as the weekly sessions. The Smucker and A. Schulman teams were to prepare during the following semester. Students were supplied with the textbook Ten Types of Innovation: The Discipline of Building Breakthroughs . In conjunction with the Honors Business Forum course, students were encouraged to read and incorporate the teachings from the book into their research project. The focus of this paper will be on the findings from group members participating in The J.M. Smucker case study. The team consisted of the following students: Anthony Jakubowski, Danielle Hickman, Adrianna Hartman, Annie Pang, and Alex Naragon. The team was tasked with researching and providing recommendations for the following three deliverables: 1. Improving upon the Folgers brand pyramid 2. Bringing the brand pyramid to life 3. Implementing the three “categories of innovation” This paper outlines the research, methodology, and conclusions the team came up with in order to reposition the Folgers brand to Millennials. Background information on the Folgers brand itself will first be provided, then secondary research on Millennials, coffee production in the United States (U.S.), and generational trends in coffee consumption. The paper will then conclude by outlining the group’s methodology, the primary research that was conducted, results of this research, specific recommendations that our team developed, and finally discuss any obstacles that were encountered throughout. 5 | FOLGERS: THE NEW ERA OF COFFEE SECONDARY RESEARCH The Coffee Industry The consumer coffee category, an $8.6 billion dollar industry, can be divided into 5 main groups: one-cup coffee (K-cup), mainstream, premium, and single-serve. The K-cup maintains the highest market share, owning 32%. Mainstream is not far behind, coming in at 29% of the market share. This segment contains the most well-known, “large tin” coffees such as those produced by Folgers and Maxwell House. The premium segment is dominated by industry powerhouses such as Dunkin’ Donuts and Starbucks; 22% of the market share is in this segment. Finally, Single Serve and Ready-to-Drink coffees occupy the remaining 9% and 8% of the market share, respectively (Folgers Case Study, 2014). The coffee market can further be divided into the major players within the industry and by what percentage they control with their unique coffee brands (Figure 1). The J.M. Smucker Company takes the lead with a 28% market share, primarily due to its Folgers, Folgers Gourmet, Dunkin’ Donuts, Rowland, and Millstone coffee brands. Kraft and Starbucks occupy 15% and 12% of the market respectively, with their equally powerful Maxwell House and Starbucks coffee brands. The remaining 45% of the market is split between small coffee companies, private label, and other U.S. coffee producers (Folgers Case Study, 2014). 6 | FOLGERS: THE NEW ERA OF COFFEE Figure 1 The J.M. Smucker Company has done an excellent job at keeping their Folgers brand in each of the five coffee categories . However, for the purposes of this paper, the focus will be on the Mainstream coffee segment and Folgers